Storm Clouds on the Horizon: A Possible New Cold War with China

“Red China’s sub fleet can prove a major threat to American ships,” wrote Albert Ravenholt for the Chicago Daily News Service in 1964, referring to Mao’s underwater menace to American naval forces assembling in the South China Sea off the coast of Vietnam. The communist submarines, supplied by the Russians, were stationed on Hainan Island, at the southernmost tip of the Chinese mainland, across the Gulf of Tonkin. At the time, China was estimated to have between 30 and 40 in operation, the fourth largest fleet after the U.S.S.R, the United States and Great Britain.

Nearly 48 years on, much has changed and yet much continues on the same trajectory. When Ravenholt, who set about becoming a reporter in Shanghai in the 1940s during the Second Sino-Japanese war, died at the age of 90 in 2010, China remained Red, even though its ideological hue had turned arguably more nationalistic after three decades of rising prosperity.

China has modernized its military in tandem with its economic growth. It has committed itself to significant military spending, endeavouring to catch up to the West’s technological prowess by building advanced precision-guided munitions, anti-satellite and cyber-warfare capabilities. Last year, it unveiled the Chengdu J-20 stealth fighter jet, which is expected to go into service in 2017-19. It has also set up a land-based anti-ship missile system to limit the ability of other nations to navigate freely in regional waters, including those around the disputed Paracel and Spratly Islands, which it estimates may contain the world’s fourth largest reserve of oil and natural gas.

In addition to augmenting its fleet of diesel subs to more than 50, China has introduced four or five nuclear-powered Jin-class (Type 094) ballistic-missile subs or “boomers”. And, in 2007, it completed construction of a modern underground base on Hainan, affording its vessels easier access to the Strait of Malacca, the South China Sea and the Indian Ocean, vital shipping lanes that carry a large portion of the world’s trade and supply China with oil from the Persian Gulf. Beijing’s long-term goal is to establish a fully fledged blue-water navy, over the course of several more decades, enabling it to project power beyond regional waters, both westward and eastward.

To round out its power-projection capabilities, China has undertaken to build a small fleet of “at least three” aircraft carriers. In 1998, after the Soviet Union dissolved, it purchased a decommissioned carrier from Ukraine specially designed for anti-submarine warfare. The Varyag was originally destined to become a floating hotel and casino off Macau, but last year the People’s Liberation Army Navy (PLAN) announced that the ship has been refitted for “scientific research, experimentation and training”. In other words, it is most likely being used to reverse-engineer a future Chinese-built carrier. It is expected to be commissioned into service sometime later this year, carrying 30 J-15 fighters, helicopters and a crew compliment of 2,000.

Having grown at an average annual rate of more than 10 percent since the 1990s, China’s military spending is now poised to outstrip Europe’s for the first time in centuries.

According to the International Institute for Strategic Studies (IISS), a London-based think tank which recently released its 2012 assessment of the global military balance, China’s defense budget has kept up a robust, if not alarming, pace since the 2008 financial crisis, while American and European budgets have declined. The institute expects Chinese spending to overtake that of NATO’s largest European members combined by 2015, prompting renewed calls for the alliance to move forward with its “smart defense” initiative. Proposed by Secretary General Anders Fogh Rasmussen, “smart defense” would see NATO pooling and sharing its members’ capabilities to achieve synergies in times of fiscal restraint.

Beijing’s military expenditure is, by far, the largest in the region if you exclude Australia and New Zealand. The National People’s Congress, which approves budgetary proposals, recently announced that the nation’s official defense spending—now second only to that of the United States in absolute terms, though still well behind it on a per capita basis—will increase this year by 11.2 percent to 670 billion yuan (about $106 billion). While smaller than the 12.7 percent allocated in 2011, the figure may not represent actual spending. Some analysts reckon it could be as much as double because the official number excludes outlays on nuclear and space weapons programs.

China is understandably anxious to safeguard its sovereignty, national security and territorial integrity. The memory of nineteenth-century European and twentieth-century Japanese invasions has heightened its sense of vulnerability to the modern military alliances formed by its neighbours, such as Japan, Taiwan and South Korea, with the United States. In recent years it has conducted large-scale drills intended to improve littoral defense, rapid mobilisation and command-and-control flexibility. These have been unambiguously calibrated to the presence of U.S. underwater, surface and air assets.

But China’s experimentation with long-range force projection represents something of a sea-change in its implications. It goes beyond attempting to achieve the capabilities required to establish a defensive ring around its territorial waters.

To allay international concerns, the PLA has stepped up its campaign of military diplomacy to improve bilateral and multilateral relationships in the Asia-Pacific and to de-escalate territorial disputes. It has also participated in global security initiatives, such as U.N.-mandated peace-keeping activities and co-operative missions with NATO to combat piracy off the Horn of Africa. Exploring ways to work together more closely and transparently was a major topic of discussion between leaders of the PLA and delegates from the International Military Staff (IMS) when they met in Beijing in February. NATO, which seeks a strengthened dialogue with the PLA, is attempting to build upon the regular, high-level meetings it quietly holds with China twice a year, as well as to broaden the communications channels it has established through Beijing’s ambassadors to Belgium.

In response to China’s strengthening naval capabilities, the Pentagon, which faces cuts of $485 billion over the next decade, has begun a major “pivot” of its strategic priorities. Adm. Sam Locklear, who took charge of U.S. Pacific Command (PACOM) in March after leading American naval forces in Europe and coordinating NATO’s operations in Libya, has been tasked with transforming PACOM into the vanguard of America’s new defense strategy. In large measure, this means solidifying the U.S. presence in the Pacific to contain China. Diplomatically, the State Department has been reaffirming its security commitments to various countries in the region and bolstering ties with longstanding allies like Japan, the Philippines and Australia. It is also deepening its relations with ASEAN nations. PACOM itself has been negotiating bilateral security agreements with Vietnam, Singapore, Thailand, Cambodia, and the Philippines. While some policy analysts see a future NATO-ASEAN partnership as critical to stability in the region, others feel that PACOM is sufficiently large and free from the encumbrance of a multinational bureaucracy to succeed in securing American strategic interests in the Pacific where NATO is felt to have failed it in the Middle East.

From the Chinese perspective, NATO’s continued existence since the end of the Cold War, its raison d’être, and its broadening scope and theatre of operations beyond the North Atlantic reveal its true colours. The general perception in China is that NATO is largely a medium for American global hegemony and military dominance. Beijing is particularly concerned about the roles it has played in toppling undesirable regimes in Afghanistan and Libya. It views these as setting a dangerous precedent for potentially supporting Taiwan should the “renegade” island declare political independence from the mainland; or, perhaps, one day to force political transformation in China should the present regime decidedly challenge the American liberal imperium.

China also recognizes, however, the desirability of normalizing and deepening relations with NATO if it is to meet its stated goal of achieving “a peaceful rise” and harmonious integration into the global system. It remains open to a multilateral and “respectful” approach to matters of mutual interest, especially those from which the CCP can garner international political capital, such as non-traditional security threats like global piracy, terrorism and arms proliferation.

As PLAN’s assertiveness escalates in the Asia-Pacific, drawing American attention away from the Atlantic, so too does Beijing’s program of indirect economic and political influence over Europe by way of increased trade and investment.

China’s lack of clarity respecting its strategic intentions was discussed in detail during Chinese Vice President Xi Jinping’s visit to the United States in February. Xi, who has closer ties to the Chinese military than Hu Jintao and is expected to succeed him to the presidency later this year, pledged to move forward in restoring and expanding Sino-American military-to-military dialogue. The Defense Consultative Talks, held annually between senior Chinese and American civilian and military officials, have chilled in recent years with the United States’ continued large arms sales to Taiwan. Xi emphasized that China’s military modernization and expansion is entirely defensive in nature, its rapid pace simply reflecting the necessity to bring its forces up to a level commensurate with the nation’s economic growth, large population and heightened international stature.

It is hoped that an improving dialogue will bring greater clarity. China may, indeed, be seeking chiefly to secure its territory and safeguard sea-lanes for the transport of energy and other natural resources from the Middle East and Africa. Or it may be hardening its economic and territorial claims over the entire South China Sea. It may be developing its capacity to support multinational missions to promote world and regional peace and stability. Or it may, as some observers contend, be intent upon weakening NATO and bringing about a new trilateral balance of power, a strategic equilibrium more conducive to managing global risks to its broadening economic portfolio in Africa and elsewhere.

In any event, one thing is already becoming clearer—that China’s mounting assertiveness and PACOM’s mandate to reassert itself in the Asia Pacific are setting the stage for a possible new Cold War.